A new set of CFTC-submitted futures contract applications moves the futures industry one more step along the path to independence from spot markets. The unique nature of ownership and control of cryptocurrencies forces the futures exchanges to take a step – management of the spot market underlying their futures contract – that is in the exchanges’ interest in every market. If regulators are not caught napping, this issue will have their full attention, since it blurs the roles of the CFTC (derivatives regulation) and the SEC (securities regulation) decisively. To be coherent, the two agencies will combine.
Cryptocurrencies have no ownership record aside from their public and private keys (two multi-digit numbers that identify each currency unit). Thus, cryptocurrencies create unique custody issues, making the protection of customers of exchanges and broker-dealers trading crypto futures from loss a different, more difficult, problem than with securities futures.